UK Budget 2023 Commentary Thread - The UK Chancellor Jeremy Cunt (Sorry, Hunt) delivered his first Budget today

For a comprehensive guide:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1142902/Web_accessible_Budget_2023.pdf

The 'UK Investor' commented that{

'The chancellor began with the assertion the Office for Budget Responsibility now predicts the UK will avoid a technical recession. The OBR also predicts inflation will fall to 2.9% by the end of the year.

There was an emphasis on economic growth. Forecasts of slightly improved UK GDP growth painted a marginally better picture, however, the UK will still lag growth rates of other major economies.

“After this year the UK economy will grow in every single year of the forecast period: by 1.8% in 2024, 2.5% in 2025, 2.1% in 2026, and 1.9% in 2027,” Jeremy Hunt said.

The budget lacked any meaningful changes on tax and the focus was on menial changes to energy prices which will not improve the cost of living crisis.

Many of the measures are designed to bring people back to work and enhance the UK’s work force.

The headline announcements include changes to childcare and the abolishment of the pension lifetime allowance.

Tax

Although the chancellor said the government desired a pro-business, pro-enterprise tax rate, he pushed on with hiking corporation tax to 25% for businesses generating more than £250,000 in profit.

This is good for small businesses but unattractive to large multinationals.

All investment will be counted as a capital allowance and will be applied to all business. This means all investment in plant and equipment can be deducted from that year’s tax.

Savings

ISA limits will be kept the same. The current limit is £20,000 for an ISA in 2022/23. The £20,000 limit has been in place since 2017/18. And all under a Conservative government.

Jobs

Older people are being enticed back into the work force with apprenticeships for over 50s, changes to pensions to keep doctors in the NHS, and reforms to childcare.

£400m will be allocated to help support workers with mental health and back pain.

Carbon capture and nuclear power schemes are designed to create jobs across the country.

Pensions

Pension tax free allowance increased from £40,000 to £60,000 and the lifetime allowance of £1m has been abolished.

Energy

The energy price cap of £2,500 for a typical household will be extended for the next three months.

The rates charged for pre-pay energy meters will be brought in line with rates for those who pay by direct debit.

Fuel duty will be frozen and the 5p cut to duty will remain.

Nuclear power will be classed as environmentally sustainable and will incentivise private investment in the sector. The chancellor announced the launch of Great British Nuclear to help bring down the price of electricity.

Education

A new £600 incentive for childminders entering the profession, and £1,200 for those joining an agency.

Every child over 9 months will receive 30 hours of free child care following a staged introduction to the scheme. This will help bolster the UK’s workforce.

Environment

£20bn will be committed to to carbon capture to help reduce net carbon emissions.

Alcohol

The duty on alcohol will be frozen.

Pints served in pubs will attract 11p lower duty than pints sold in supermarkets.

Debt

Jeremy Hunt says underlying debt will be 92.4% of GDP by next year and will continue to fall as proportion of GDP each year there after. This government’s debt forecasts should be taken with a truck load of salt.

The deficit is forecast to be 1.7% by 2027-28.

Innovation

R&D tax credits will be expanded.

To build a hub for AI in the UK the chancellor set out a £1m prize each year for ten years for innovation in the sector.

Defence

£11bn will be added to the defence budget.

Pot holes

An additional £200m will be committed to improving the road network, including potholes.

Leisure Centres

Hardly a headline grabber, but a £63m fund will be set up to save swimming pools and leisure centres.

Investment Zones

Twelve new investment zone have been announced which are supposed to follow in the foot steps of Canary Wharf.

(Link: https://ukinvestormagazine.co.uk/spring-budget-2023-highlights/)

 

[libRT]

Faggots talking faggotry, totally out of their ass. They think they can avoid eating shit forever by cheating then passing the buck like those before them, they don't know we're pretty much at the end of that cliff

 

[Otterly]

Not the worst we’ve seen, by a long way. I’d be quite positive about it, if we hadn’t just spunked a few hundred billion up the wall on a nonsensical covid response that we will be paying for for a hundred years.
The nuclear stuff is good, long term though. classing it as sustainable is a bigger thing than has been talked about in the press (because to do so would torpedo the green Mafia somewhat.)
The carrot and stick approach to getting more in the workforce looks like the stick will be bigger in subsequent years
Dunno, nothing too terrible.

 

[teriyakiburns]

I'm not applauding until they nuke IR35. It has become an enormous anchor on the entire economy.

 

[Otterly]

I'm not applauding until they nuke IR35. It has become an enormous anchor on the entire economy.

Is that a tax thing?

 

[Whoopsie Daisy]

How it started:

"Liz truss and Kami Kwasi will cripple Britain with their insane proposals. remove them from office, now!"

How it's going:

"Here's all the shit Liz Truss promised, but worse, without allowing fracking on onshore windfarms. But nuclear is now green"


Getting 2.5 million people back to work and bringing over 50's out of retirement and back in to work, while stopping people retiring early, is pretty much a draft and conscription back in the employment. On top of that, we are reducing the restrictions around allowing immigrants to work on construction? That is not good.

But it's okay because:

 

[Overly Serious]

Is that a tax thing?

It's a tax thing. I don't recall when it was brought in but the essence of it is this. Because company profits are taxed at a lower rate than individual income tax a lot of contractors worked by starting a limited company and charging their clients through that and getting the profits from the company. Same work but you keep more of the money you earn. I only know of IT people doing it where well-paid contracting is commonplace but maybe it applies to others? In any case, the government decided this was a problem to be fixed and introduced these IR35 regulations to determine whether someone was "legitimately" an independent business or if it was a figleaf for regular employment (even though regular would imply permanence, holidays and all that). I don't have a view on if it's a problem to be fixed or not, ethical or unethical. But the rules and processes around it are complex and there's an entire micro-industry around IR35 insurance, proving IR35 status or that you're outside of it. Complex and not sure it's worth the benefit or even really right to try and close it as there's a whole bunch of downsides to being a contractor.

 

[Clem Fandango]

Free childcare for my boy from next year and "wraparound" care when he goes to school is a big fucking win. Might actually have a second kid now.

 

[Overly Serious]

I've some reservations about the free childcare. If the work being done isn't enough to pay for the childcare in the first place, then how is tax payers paying for it for others actually a net gain for the economy?

The description of £250,000 being the line at which small business cuts off is a little low, imo. Not that it isn't a salary most of us would love to get but in terms of business and the way inflation is going, I think that's too low. Going to hinder quite a few small businesses, I think.

I don't know what abolishing the 1 million cap on pensions means. Anybody explain that?

 

[Morethanabitfoolish]

Free childcare for my boy from next year and "wraparound" care when he goes to school is a big fucking win. Might actually have a second kid now.

Congratulations. May your child(ren) never need to post on Kiwifarms.

 

[libRT]

I've some reservations about the free childcare. If the work being done isn't enough to pay for the childcare in the first place, then how is tax payers paying for it for others actually a net gain for the economy?

Basically this, its not, others will have to bear the direct and indirect burden.

The description of £250,000 being the line at which small business cuts off is a little low, imo. Not that it isn't a salary most of us would love to get but in terms of business and the way inflation is going, I think that's too low. Going to hinder quite a few small businesses, I think.

It is being used to cut competition out of high profit markets like tech and finance. Standard government bullshit probably securing fishy rishi a cushy non-job at a megacorp post-PM.

I don't know what abolishing the 1 million cap on pensions means. Anybody explain that?

1 million lifetime cap on tax-free pensions, so people are now able to get tax relief when paying into pensions beyond that (not greater than 60k/year though).

 

[teriyakiburns]

Is that a tax thing?

Yes.

@Overly Serious explained most of it, but misses out that it's also double-dipping taxation. I freelance, so I handle my own payroll, pension, etc and so on. I pay PAYE on my wage and I pay corporation tax on my company's profits, which in combination ends up being about the same as a permie's PAYE burden for a given hourly rate. Running my own company, in theory, prevents any ambiguity when it comes to invoicing: my company invoices my client's company. They don't worry about tax or benefits, they just pay for a service.

Under the current shape of the IR35 rules, companies are required to decide if their contractors are "inside" or "outside" IR35. Inside IR35 means that the contractor is treated as an employee for the purpose of withholding income tax, but conveniently not for the purpose of anything else, like accrued holiday time or other benefits. That means that, if my client decides I'm "inside" IR35, my invoice now has an amount withheld for PAYE by the client. My company still has to pay corporation tax from the remainder of that invoice, and because I'm an employee of my company, I also have to withhold PAYE on my own company wage and any dividends I take at the end of the year. The government taxes me twice for the same thing.

Most large companies are just blanket-ruling everyone inside IR35 because the rules are so arcane and confusing.

IR35 is a prominent issue for tech workers, but it also affects just about every industry outside the building trade, which has its own arrangements. Truck drivers are the next biggest; independent drivers fall squarely under IR35, which turns a marginal profit into an actual loss. It's made the trucker situation even worse than it already was for no benefit, because they're not retraining to other jobs or taking permanent positions at a larger firm. Instead, they're retiring and taking benefits.

It's been a clusterfuck. When the latest version of the rules was brought into force, HMRC lost half its contractors overnight, because they realised they'd be "inside" IR35 and subject to extra tax. They had to implement special exceptions for government contractors, just to be sure they didn't lose a huge chunk of their workforce. They then turned around and told the rest of us that the exception wasn't for mere plebs and that we should just lump it. Contractors are retiring everywhere, or leaving the country entirely.

IR35 was Blair and Brown's creation, at the behest of the big consultancy firms that the Blair government was so eagerly shacked up with. They see their independent competition vapourised, and HMRC gets to take engage in its favourite pastime of reaching into peoples' pockets and taking even more of their money. It also gets to audit people and take even more money in the process.

 

[St.Davis]

I have an economic proposal:

Stop importing infinity wogs, and stop dumping money into black holes like The Ukraine.

 

[Socrates]

So are you guys even fully out of the EU yet? Like, did the retarded Irish border thing ever get sorted out? It kinda seems like everybody just got sick of talking about it and started ignoring the whole thing.

 

[St.Davis]

So are you guys even fully out of the EU yet? Like, did the retarded Irish border thing ever get sorted out? It kinda seems like everybody just got sick of talking about it and started ignoring the whole thing.

Ostensibly yes, I belive?

If you're talking about the Nor'n Ireland/ROI divide: That's never getting "sorted out". I believe that the IRA shot a policeman not long back, so perhaps the violence will be escalating again.